1 | Page
CALIFORNIA LIFE, ACCIDENT, AND
HEALTH INSURANCE Questions and
Answers
Which of the following statements correctly describes a contract of
indemnity ?
Ans: One party is restored to the same financial position the part was in
before the loss occurred
Under a noncancellable health insurance policy, an insurer can
Ans: Cancel the policy for nonpayment of premium
What does ESOP stand for?
Ans: Employee Stock Ownership Plan
What does the term "illustration" mean when used in the phrase
"life insurance policy illustration" , according to the California
Insurance Code
Ans: Presentation of policy features that includes non-guaranteed
elements
Life insurance creates an immediate estate. This phrase means
Ans: when the insured dies, a death benefit is paid; Life insurance
creates an immediate estate by paying a death benefit whenever the
insured dies.
When handling premiums for an insured, an agent is acting in
which capacity?
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, 2 | Page
Ans: Fiduciary
An agent acting as an insurance agent, broker, solicitor, life agent, or bail
agent acts in fiduciary capacity when handling premiums or return
premiums
Health insurance policies typically contain a provision stating that
insureds and their insurer will share covered losses in an agreed
proportion. Which provision does this refer to?
Ans: Coinsurance is a sharing of expenses by the insured and the
insurer. Once the insured satisfies the deductible, the insurance
company pays a high percentage of the additional expenses (usually 75%
or 80%) and the insured pays the remainder.
Kimberly is an employee on leave under the Family and Medical
Leave Act (FMLA). What will happen to her group health coverage?
Ans: She continues to be enrolled during the leave; FMLA requires the
same group health insurance benefits that would exist if the employee
were not on leave.
Which of the following is NOT true regarding a family policy that
covers children?
Ans: Conversion of child's coverage to permanent insurance requires
evidence of insurability
Which of the following describes a contributory group insurance
plan?
Ans: Part of the premium is paid by the employee
What is a common reason people purchase an annuity?
Ans: To protect against the risk of outliving their financial resources
of the After the annual deductible is met, Medicare Part B will pay
remaining approved charges.
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Ans: 80%
A contract requires
Ans: an offer and acceptance of the contract terms
When selling a long term care insurance rider to an applicant, a
life agent must take into consideration all of these factors. EXCEPT
Ans: Attending physician's statement
correct answer- ability to pay, needs of the client, goals of the client
What is the proper order of initial life insurance premiums, from
lowest to highest ?
Ans: Modified premium, ordinary life, single premium
What does the insurance term "indemnity " refer to?
Ans: "Make whole"
Contracts of indemnity attempt to return the
insured to their original financial position, or "made whole".
The probability of death, listed by year, is demonstrated in
Ans: "Mortality tables".
Mortality tables give a measure of the number of deaths in a given
population over a certain period of time.
Which type of health insurance policy cannot be canceled by the
insurer nor increase the premiums?
© 2025 All rights reserved
CALIFORNIA LIFE, ACCIDENT, AND
HEALTH INSURANCE Questions and
Answers
Which of the following statements correctly describes a contract of
indemnity ?
Ans: One party is restored to the same financial position the part was in
before the loss occurred
Under a noncancellable health insurance policy, an insurer can
Ans: Cancel the policy for nonpayment of premium
What does ESOP stand for?
Ans: Employee Stock Ownership Plan
What does the term "illustration" mean when used in the phrase
"life insurance policy illustration" , according to the California
Insurance Code
Ans: Presentation of policy features that includes non-guaranteed
elements
Life insurance creates an immediate estate. This phrase means
Ans: when the insured dies, a death benefit is paid; Life insurance
creates an immediate estate by paying a death benefit whenever the
insured dies.
When handling premiums for an insured, an agent is acting in
which capacity?
© 2025 All rights reserved
, 2 | Page
Ans: Fiduciary
An agent acting as an insurance agent, broker, solicitor, life agent, or bail
agent acts in fiduciary capacity when handling premiums or return
premiums
Health insurance policies typically contain a provision stating that
insureds and their insurer will share covered losses in an agreed
proportion. Which provision does this refer to?
Ans: Coinsurance is a sharing of expenses by the insured and the
insurer. Once the insured satisfies the deductible, the insurance
company pays a high percentage of the additional expenses (usually 75%
or 80%) and the insured pays the remainder.
Kimberly is an employee on leave under the Family and Medical
Leave Act (FMLA). What will happen to her group health coverage?
Ans: She continues to be enrolled during the leave; FMLA requires the
same group health insurance benefits that would exist if the employee
were not on leave.
Which of the following is NOT true regarding a family policy that
covers children?
Ans: Conversion of child's coverage to permanent insurance requires
evidence of insurability
Which of the following describes a contributory group insurance
plan?
Ans: Part of the premium is paid by the employee
What is a common reason people purchase an annuity?
Ans: To protect against the risk of outliving their financial resources
of the After the annual deductible is met, Medicare Part B will pay
remaining approved charges.
© 2025 All rights reserved
, 3 | Page
Ans: 80%
A contract requires
Ans: an offer and acceptance of the contract terms
When selling a long term care insurance rider to an applicant, a
life agent must take into consideration all of these factors. EXCEPT
Ans: Attending physician's statement
correct answer- ability to pay, needs of the client, goals of the client
What is the proper order of initial life insurance premiums, from
lowest to highest ?
Ans: Modified premium, ordinary life, single premium
What does the insurance term "indemnity " refer to?
Ans: "Make whole"
Contracts of indemnity attempt to return the
insured to their original financial position, or "made whole".
The probability of death, listed by year, is demonstrated in
Ans: "Mortality tables".
Mortality tables give a measure of the number of deaths in a given
population over a certain period of time.
Which type of health insurance policy cannot be canceled by the
insurer nor increase the premiums?
© 2025 All rights reserved
